Hub Group, Inc. Reports Record Third Quarter 2012 Earnings

22 Oct, 2012, 16:00 ET from Hub Group, Inc.

DOWNERS GROVE, Ill., Oct. 22, 2012 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2012.

Hub Group reported record net income of $18.5 million for the third quarter ended September 30, 2012, an increase of 14% compared to the third quarter of 2011.  Diluted earnings per share for the third quarter of 2012 was $0.50.   

Hub Group's third quarter 2011 pre-tax income included approximately $1.1 million of costs related to the Mode Transportation integration and Hub's Truck Brokerage restructuring.  Excluding the effects of these costs, non-GAAP earnings per share was $0.46 for the 2011 third quarter (see table below).  Earnings per share increased 9% when compared with the non-GAAP earnings per share in the prior year period. 

The Hub segment's revenue increased 10% to $619 million.  Third quarter intermodal revenue increased 11% to $444 million.  The increase was primarily attributable to 9% volume growth.  Truck brokerage revenue increased 6% to $88 million this quarter.  Third quarter Unyson Logistics revenue increased 14% to $87 million.  The Hub segment's operating income was $25.3 million

The Mode segment's revenue increased 1% to $200 million for the third quarter.  Operating income was $5.0 million

Hub Group ended the quarter with $80 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:30 p.m. Eastern Time on Monday, October 22, 2012 to discuss its third quarter results and outlook for the year.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer, and Terri A. Pizzuto, Executive Vice-President, Chief Financial Officer and Treasurer.

This call is being webcast and can be accessed through the Investors link on Hub Group's Web site at www.hubgroup.com.  The webcast is listen-only.  Those interested in participating in the question and answer session should follow the telephone dial-in instructions below.

To participate in the conference call by telephone, please call ten minutes early by dialing (888) 679-8038.  The conference call participant code is 96710868. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PR6K8D8R8 .  Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference, bypassing the operator.  The call will be limited to 60 minutes, including questions and answers.

An audio replay will be available through the Investors link on the Company's Web site at www.hubgroup.com. This replay will be available for 30 days.

ABOUT HUB GROUP: Hub Group, Inc. is a leading asset-light freight transportation management company providing comprehensive intermodal, truck brokerage and logistics services. The Company operates through a network of offices and independent agents throughout the United States, Canada and Mexico.

CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this press release that are not historical, including statements about Hub Group's or management's earnings guidance, intentions, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and subject to risks. Such statements should be viewed with caution. Actual results or experience could differ materially from the forward-looking statements as a result of many factors. Factors that could cause actual results to differ materially include the factors listed from time to time in Hub Group's SEC reports including, but not limited to, the annual report on Form 10-K for the year ended December 31, 2011 and the reports on Form 10-Q for the periods ended March 31, 2012 and June 30, 2012.  Hub Group assumes no liability to update any such forward-looking statements.

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months

Nine Months

Ended September 30,

Ended September 30,

2012

2011

2012

2011

Revenue

$ 804,888

$ 752,179

$ 2,323,085

$ 1,988,759

Transportation costs

713,301

665,478

2,060,398

1,760,022

Gross margin

91,587

86,701

262,687

228,737

Costs and expenses:

Salaries and benefits

31,385

32,002

96,120

91,525

Agent fees and commissions

13,810

13,884

41,106

28,400

General and administrative

14,430

12,612

39,741

37,523

Depreciation and amortization

1,611

1,560

5,008

3,968

Total costs and expenses

61,236

60,058

181,975

161,416

Operating income

30,351

26,643

80,712

67,321

Other income (expense):

Interest expense

(300)

(236)

(908)

(319)

Interest and dividend income

37

41

104

118

Other, net 

(17)

17

(58)

286

Total other (expense) income 

(280)

(178)

(862)

85

Income before provision for income taxes

30,071

26,465

79,850

67,406

Provision for income taxes

11,576

10,189

30,741

26,242

Net income

$   18,495

$   16,276

$      49,109

$      41,164

Basic earnings per common share

$ 0.50

$ 0.44

$ 1.32

$ 1.12

Diluted earnings per common share

$ 0.50

$ 0.44

$ 1.32

$ 1.11

Basic weighted average number of shares outstanding

37,079

36,923

37,064

36,903

Diluted weighted average number of shares outstanding

37,206

37,065

37,180

37,049

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended September 30, 2012

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$       619,336

$       199,903

$           (14,351)

$       804,888

Transportation costs

552,071

175,581

(14,351)

713,301

Gross margin

67,265

24,322

-

91,587

Costs and expenses:

Salaries and benefits

27,852

3,533

-

31,385

Agent fees and commissions

401

13,409

-

13,810

General and administrative

12,566

1,864

-

14,430

Depreciation and amortization

1,118

493

-

1,611

Total costs and expenses

41,937

19,299

-

61,236

Operating income

25,328

5,023

-

30,351

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended September 30, 2011

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$       560,810

$       197,761

$             (6,392)

$       752,179

Transportation costs

497,204

174,666

(6,392)

665,478

Gross margin

63,606

23,095

-

86,701

Costs and expenses:

Salaries and benefits

26,884

5,118

-

32,002

Agent fees and commissions

660

13,224

-

13,884

General and administrative

10,141

2,471

-

12,612

Depreciation and amortization

1,003

557

-

1,560

Total costs and expenses

38,688

21,370

-

60,058

Operating income

24,918

1,725

-

26,643

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Nine Months

Ended September 30, 2012

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$    1,778,436

$       581,378

$          (36,729)

$    2,323,085

Transportation costs

1,584,844

512,283

(36,729)

2,060,398

Gross margin

193,592

69,095

-

262,687

Costs and expenses:

Salaries and benefits

84,523

11,597

-

96,120

Agent fees and commissions

1,526

39,580

-

41,106

General and administrative

34,004

5,737

-

39,741

Depreciation and amortization

3,338

1,670

-

5,008

Total costs and expenses

123,391

58,584

-

181,975

Operating income

70,201

10,511

-

80,712

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Nine Months

Ended September 30, 2011

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$    1,606,607

$       391,009

$           (8,857)

$    1,988,759

Transportation costs

1,423,108

345,771

(8,857)

1,760,022

Gross margin

183,499

45,238

-

228,737

Costs and expenses:

Salaries and benefits

81,796

9,729

-

91,525

Agent fees and commissions

2,049

26,351

-

28,400

General and administrative

32,464

5,059

-

37,523

Depreciation and amortization

2,890

1,078

-

3,968

Total costs and expenses

119,199

42,217

-

161,416

Operating income

64,300

3,021

-

67,321

 

 

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)

Three Months

Nine Months

Ended  September 30,

Ended  September 30,

Change

Change

Change

Change

2012

2011

$

%

2012

2011

$

%

Diluted GAAP EPS

$    0.50

$    0.44

$   0.06

13.6%

$    1.32

$    1.11

$    0.21

18.9%

Integration expenses and

restructuring costs

$       -

$    0.02

$ (0.02)

$       -

$    0.06

$   (0.06)

Diluted NON-GAAP EPS (adjusted)

$    0.50

$    0.46

$   0.04

8.7%

$    1.32

$    1.17

$    0.15

12.8%

Diluted Shares

37,206

37,065

37,180

37,049

 

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact of the items identifiable in this table. For internal purposes, Hub excludes these items from results when evaluating operating performance. This table and Hub's internal use of non-GAAP earnings per share are not intended to imply, and should not be interpreted as implying, that non-GAAP earnings per share is a better measure of performance than GAAP earnings per share.

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

September 30,

December 31,

2012

2011

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$           79,585

$           49,091

Accounts receivable trade, net

385,821

326,537

Accounts receivable other

22,060

23,878

Prepaid taxes

139

2,392

Deferred taxes

4,329

4,838

Prepaid expenses and other current assets

10,972

9,056

TOTAL CURRENT ASSETS

502,906

415,792

Restricted investments

16,529

14,323

Property and equipment, net

151,195

124,587

Other intangibles, net

20,445

21,667

Goodwill, net

263,306

263,470

Other assets

2,161

2,845

TOTAL ASSETS

$         956,542

$         842,684

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$         237,790

$         204,693

Accounts payable other

22,579

17,289

Accrued payroll

15,551

16,721

Accrued other

47,248

29,962

Current portion of capital lease

2,292

2,237

TOTAL CURRENT LIABILITIES

325,460

270,902

Non-current liabilities

19,239

17,717

Non-current portion of capital lease

21,684

23,436

Deferred taxes

98,769

91,764

STOCKHOLDERS' EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized;

no shares issued or outstanding in 2012 and 2011

-

-

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2012 and 2011; 37,105,441 shares outstanding in 2012 and 36,860,260 shares outstanding in 2011

412

412

Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2012 and 2011

7

7

Additional paid-in capital

166,148

168,800

Purchase price in excess of predecessor basis, net of tax

 benefit of $10,306

(15,458)

(15,458)

Retained earnings

450,297

401,188

Other comprehensive income

2

4

Treasury stock; at cost, 4,119,351 shares in 2012

and 4,364,532 shares in 2011

(110,018)

(116,088)

TOTAL STOCKHOLDERS' EQUITY

491,390

438,865

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$         956,542

$         842,684

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended

September 30,

2012

2011

Cash flows from operating activities:

Net income

$        49,109

$        41,164

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization 

16,300

10,944

Deferred taxes

7,693

7,189

Compensation expense related to share-based compensation plans

4,826

3,675

Loss (gain) on sale of assets

42

(16)

Excess tax benefits from share-based compensation

(97)

-

Changes in operating assets and liabilities, net of effects of acquisition:

Restricted investments

(2,206)

362

Accounts receivable, net

(57,417)

(57,275)

Prepaid taxes

2,253

167

Prepaid expenses and other current assets

(1,913)

(2,275)

Other assets

685

406

Accounts payable

38,386

29,316

Accrued expenses

8,917

12,881

Non-current liabilities

1,210

(344)

Net cash provided by operating activities

67,788

46,194

Cash flows from investing activities:

Proceeds from sale of equipment

819

316

Purchases of property and equipment

(34,671)

(35,382)

Cash used in acquisitions, net of cash acquired

(425)

(83,057)

Net cash used in investing activities

(34,277)

(118,123)

Cash flows from financing activities:

Proceeds from stock options exercised

46

78

Stock tendered for payments of withholding taxes

(1,800)

(1,513)

Capital lease payments

(1,697)

(185)

Excess tax benefits from share-based compensation

443

1,069

Net cash used in financing activities

(3,008)

(551)

Effect of exchange rate changes on cash and cash equivalents

(9)

(12)

Net increase (decrease) in cash and cash equivalents

30,494

(72,492)

Cash and cash equivalents beginning of period

49,091

115,144

Cash and cash equivalents end of period

$        79,585

$        42,652

 

SOURCE Hub Group, Inc.



RELATED LINKS

http://www.hubgroup.com